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Store openings and closures - H1 2018

What’s happening on the British high street? We look at the latest research on store openings and closures

High streets are still facing testing times as new research shows the gap between closures and openings widens to a record level, but closures have stabilised.

Those most affected by online shopping like fashion and electrical stores are key drivers of net declines, as too are public houses & inns and Italian restaurants – both categories impacted by overcapacity and the trend we are seeing for consumer preference for in-home leisure. The net decline is not however, unexpected, given heightened restructuring activity and continued digitisation of services.

​The shopper’s love affair with small indulgences continues as booksellers, ice cream parlours, stationers and coffee shops all showed a net growth in the first half of 2018 (net growth = Number of store openings minus the number of closures).

As store closures start to plateau, the net decline is driven by a reduction in store openings. The recent Budget announcement to reduce business rates for smaller retailers is designed to help reverse this decline.

An overview of the last five years

Store closures have slightly increased against the equivalent period last year but it’s a significant fall in store openings driving overall net decline - a record level for the British high street, according to our research*.

A net 1,123 stores disappeared from Britain’s top 500 high streets in the first half of the year compared with a 222 store loss over the equivalent period last year

Daily store closure rates have plateaued though at 14 stores a day but store openings have fallen, with a 773 difference between store openings in H1 2017 and H1 2018.

"The continued rate of store closures reflects the new reality that many of us prefer to shop online and increasingly eat, drink and entertain at home."

Lisa Hooker, PwC consumer markets leader

Store category risers and fallers

Store categories experiencing the greatest net growth tend to be small chains like booksellers, ice-cream parlours, stationers and coffee shops

​Supermarkets are also experiencing a net growth

Conversely overcapacity and a growing shopper preference for in-home leisure is demonstrated by the net loss of 340 restaurant, catering and entertainment outlets in H1 2018, a turnaround from two years of net rises. Other leisure categories were also affected with bars and bookmakers just missing the top five faller categories.

The impact of CVAs and retail administrations has also introduced new categories to the fallers list. Electrical goods and Italian restaurants are particularly prominent. To read more about CVAs please click here

Many traditionally store-based service businesses, such as banks, estate agents, recruitment agencies and travel agents, have continued to move online, albeit with a slowing rate of closure

"The transformation of the UK high street raises questions on how legacy retailers and leisure operators should restructure and what new investment is needed. We believe that CVAs can be helpful restructuring tools, but alone are insufficient."

Zelf Hussain, PwC retail restructuring partner

Detail from across the nation

East Midlands

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East of England

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Greater London

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North East

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North West

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Scotland

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South East

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South West

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Wales

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West Midlands

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Yorkshire and the Humber

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About the research:

PwC and the LDC’s analysis tracked 66,961 outlets operated by multiple retailers across the top 500 town centres in Great Britain, between 1 January 2018 and 30 June 2018

Multiples are retailers that have more than 5 outlets nationally

Each premises was visited and its occupancy status recorded as occupied, vacant or demolished. Vacant units are those units, which did not possess a trading business at that location on the day. Internal shopping centre data is included where there is landlord co-operation.

The town centre is defined as per DCLG’s definition of the retail core. Scotland has no official retail core geography so the geography taken is the postal town area where not specified otherwise.

Net change is openings less closures. The percentage change is derived from the net change figure relative to the total number of live multiple businesses.

The closures figure is the total number of closures divided by 183 i.e. half of the days in 2018 (365).